Shanghai Home Sales Slid 36.5% in June

Sales of new housing in Shanghai dropped 36.5 percent in June compared to the same month last year, as China’s commercial capital continues to be hit by a housing slump.

Although a survey released one week ago by China Index Academy, a unit of real estate website Soufun showed housing prices in Shanghai climbing by 0.25 percent, bucking a nationwide downward trend, the reality of the city’s housing market seems to be that there isn’t one. At least not until somebody blinks.

Figures published last week by the 21st Century Business Herald, citing real estate agencies, estimate that total Shanghai housing sales in June totalled 713,700 square metres. For the first six months of the year, the volume of space sold in the city fell 32.63 percent to around four million square metres, according to the report.

Second Hand Home Sales Also Down

In addition to the slowdown in new home deals, sales of second-hand homes were also off in June, with an index tracking prices in the market falling for the first time in two years.

The gauge of pre-owned home sales published by the Shanghai Existing House Index Office fell 0.05 percent in June, after having climbed for 24 consecutive months.

As a signal of how little pressure there is on existing homeowners to sell, the inventory of used homes available on the Shanghai market actually fell to a four year low last month, totalling 102,600 units at the end of the period.

New Home Inventory Reaching Record Highs

In contrast to the second-hand market, the supply of new homes in China’s biggest city continued to grow last month reaching 11 million unsold square meters by the end of June – a new high for the city.

According to data from Shanghai Deovolente Realty 5.26 million square metres of this unsold inventory was added during the first six months of 2014, an increase of 6.7 percent over the amount of new housing supply added during the first half of 2013.